Importance Of U-6 Unemployment Data
The U-6 Unemployment data shows people that are under-employed. This means people might have a part-time job but would like full-time work, or they are looking for full, but only being offered part-time.
In addition, when it upticks it can show companies are not willing to layoff employees because they worry the economy will achieve the soft landing, but they are moving employees to part-time work as their sales are slowing.
The U-6 Unemployment data is a fantastic indicator of coming recessions historically. For every recession going back 50 years (aside from the Black Swan event of Covid), an uptick in U-6 has predicted recessions on the horizon. Note in the chart that U-6 has been increasing for months, now at 7.3%.
While most investors are believing the Federal Reserve narrative of a soft or no landing scenario, the U-6 is telling investors a hard landing may be coming.
The next U-6 Employment Report will be released on April 5th, 2024. Please note it is on the headline number the media pays attention to, but smart economists and investors absolutely look at it.
